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Thursday, May 17, 2007

MTN: Making SMEs the centre point

Features of the week:

At the second annual MTN’s Small and Medium Enterprises (SMEs) Expo held recently in Abuja, REMMY NWEKE, reports that the telco is making SMEs the centrepoint of its contribution to the economy.

Over the years, governments and organisations have come to recognise the importance of small and medium enterprises, otherwise known as SMEs.

Defined as companies whose headcount or turnover falls below certain limits, especially with employee rate below 10, SMEs have continued to attract global attention based on their impact to the growth of economies, mostly in developing countries of the world of which Africa is in the high-level of SME demands to soar her economies and development.

However, experts traced the abbreviation of SME to the European Union (EU) among other international organizations, such as the World Bank, the United Nations and the World Trade Organisation (WTO), according to online encyclopaedia, Wikipedia.

And for experts at these organisations, the term small and medium sized businesses (SMB) has become more standardized from one country to another. Hence, EU member states, for instance, have come up with a home-grown definition of what constitutes an SME. One of such is that traditional German definition of SMEs or SMB had a limit of 500 employees, whereas in Belgium it could have been 100 staff.

Also, EU standardisation concept paved the way for its current definition that categorises companies with fewer than 50 employees as ‘small’ and those with fewer than 250 as ‘medium.’

Conversely, in the United States, when small business is defined by the number of employees, which often refers to those with less than 100 employees, while medium-sized business often refers to those with less than 500 employees. Although, the most widely used American definition of micro-business by the number of employees is the same of that of European Union: less than 10 employees, even as business enterprises of fewer than 10 employees often classified as Small Office Home Office (SOHO).

Therefore, in most economies, smaller enterprises are known to be in greater numbers, such that in EU, SMEs consist of approximated 99 per cent of all firms and employment ratio between them is about 65 million people.

Recognising this fact, leading GSM operator and Third Generation (3G) complaint, MTN Nigeria, recently held a two-day seminar otherwise known as MTN SME Expo, which is on its second edition, at the Federal Capital Territory (FCT) Abuja, precisely at the Grand ball Room of the Abuja Sheraton Hotel and Towers, with the theme, “Finance and Infrastructure as imperatives for SME Development in Nigeria.”

The event graced by thousands of SMEs, their service providers, government agencies, stakeholders and prospective SMEs, paved the way for the unveiling of the MTN SME Assist Plan.

The plan is one of MTN’s landmark packages offered in conjunction with the International Finance Corporation (IFC), a subsidiary of World Bank, to encourage the growth in the SME sub-sector.

Announcing the latest SME package, General Manager, Business Marketing at MTN Nigeria, Mr. Tunji Adeyinka, said that the collaboration would provide opportunities for growth of SMEs in the country.

The package, he said, has been streamlined to focus on capacity building of SMEs to advance their productivity through the provision of access to key management tools and skills.

“It involves the deployment of IFC-diagnostic evaluation tool to reveal the most important weak areas in the business of SMEs that could be quickly addressed to make them investment-friendly and to favourably compete in the market place,” he said.

According to him, the objective of the plan is to, among other things, assist estimated 500 SMEs, at the first phase; appraise their strengths, weakness and opportunities by promoting SMEs’ competitiveness and sustainability through the provision of relevant business development services; develop export capacity of SMEs; and especially support women-owned SMEs.

Mr. Adeyinka also said that the MTN SME Assist Plan is open to all SMEs in the country, adding, “all it takes to get registered in the plan is for the SME to ensure all its staff telephone numbers are on the MTN post-paid platform – MTN XtraValue of XtraSmart and apply to the telecom provider stating company name, address and the post-paid numbers of its members of staff.”

He explained that out of the 500 SMEs to benefit in the first batch, the package seeks to provide investment support services, such as in business plans and finance resourcing for 10 – 15 deserving ones; provide capacity building for 20 – 50 exporting SMEs; provide industry-specific development for 50 - 70 and capacity building for 20 - 50 women entrepreneurs and their staff.

Mr. Adeyinka further said that the scheme, when implemented, would address most of the issues that kept re-occurring during seminar that hamper the growth of SMEs, with top of it bothering on finance and capacity building.

Participants at the seminar also deliberated and proffered solutions to financial and infrastructural challenges facing the SMEs in the country.

For the Director-General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mrs. Modupe Adelaja, the MTN Assist Plan would go a long way in uplifting the participation of the nation’s SMEs in building the economy.

She also underscored the role of the government in ensuring that adequate environment is provided for the SMEs in the country, just as she tasked SMEs to tap into this offer being dangled by MTN in order to remain ahead of competition and actively contribute to the growth of the economy.

The Group Managing Director, United Bank for Africa (UBA) Plc, Mr. Tony Elumelu represented by the Fund Manager, UBA Private Equity, Mr. Aina Dele-Adegbola, in his remark at the occasion, noted that it’s a wake up call to other large corporate concerns as it is only by collective efforts that the huge and varied challenges facing the SMEs could be addressed.

Other experts, who spoke at the seminar from across all industries, were of the opinion that the project will go a long way in addressing the issues of management skills deficiency and funding in the SME sub-sector.

Just as it will also complement the efforts of SMEDAN, Small and Medium Enterprises Equity Investment Scheme (SMEEIS), Bank of Industry (BoI), Abuja Enterprise Agency (AEA) and other government agencies created to stimulate the growth of the SME sub-sector in the country.

The 2nd MTN SME Expo, equally was later divided into three sessions, namely the entrepreneur, bank and government related respectively.

While the entrepreneur’s fear of loss of ideas and plans, unwillingness to dilute ownership, inability to package attractive proposals, product standard issues were grouped under entrepreneur-related challenges.

The bank-related challenges included limited technical skills, investment preference, geographical preference and appetite for large volume transactions, while deficient infrastructure, macro-economic instability and tax issues were grouped under government-related challenges among others.

Though the scheme could be said to have been well-received, but onus rests on SMEs to tap into this opportunities offered by MTN in collaboration with IFC, because, issues such as the challenges of capacity building to SMEs is expected to decrease to a greater extent, especially for those who grab the MTN Assist Plan with two hands.

Remarkable here is that in Nigeria today, over 50 per cent of the workforce is reportedly employed in the public sector, whereas the reverse is the trend in developing economies of the world. Hence, the Federal Government’s decision to ensure that potential contributions of SMEs will transform into accelerated job creation, economic empowerment and poverty alleviation programmes to reserve this trend and make the Organised Private Sector (OPS) to come on stream, which of course would start with increased SMEs in the country.

In no long distance, what this MTN SME Assist Plan portends is unimaginable which gives the hope that happy days are here again for those SMEs ready to catch up with the train while its still on the rail track.

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